Public Provident Fund (PPF) Scheme Calculator

A Complete Guide to Public Provident Fund (PPF)

The Public Provident Fund (PPF) is a long-term savings and investment scheme from the Government of India. Think of it as a super-safe piggy bank for your future. Its main purpose is to help you save money for big life goals like retirement, your children's education, or buying a house. It is extremely popular because it is 100% safe, gives good returns, and has the best possible tax benefits you can get in India.

Key Highlights: Why is PPF a Must-Have Investment?

• Complete Safety: Your money is backed by the Government of India, so it's completely risk-free.
• Triple Tax Benefit (EEE): The biggest attraction! Your investment, interest, and the final amount are all tax-free. (More on this below).
• Good Long-Term Returns: Offers an attractive interest rate that is usually higher than bank FDs. The power of compounding creates a huge amount over 15 years.
• Long Lock-in Period: The 15-year tenure helps you stay disciplined and builds a large corpus without temptation to withdraw.
• Loan & Withdrawal Facility: You can take a loan or make partial withdrawals in case of emergencies.
• Low Investment Amount: You can start with just ₹500 a year, making it accessible to everyone.

Who Can Open a PPF Account? (Eligibility)

• Any individual who is a resident of India can open a PPF account.
• You can open only one PPF account in your name.
• You can also open a PPF account on behalf of a minor (your child), but the total investment in your and your child's account cannot exceed ₹1.5 lakh per year.
• Non-Resident Indians (NRIs) cannot open a new PPF account. However, if they had an account while they were a resident, they can continue it until maturity.

Investment Rules: Deposits and Limits

• Minimum Deposit: You must deposit at least ₹500 in a financial year.
• Maximum Deposit: The maximum you can deposit is ₹1,50,000 in a financial year.
• Deposit Frequency: You can deposit the money in a lump sum or in a maximum of 12 installments in a year.
• Penalty: If you don't deposit the minimum ₹500, your account becomes inactive. To reactivate it, you have to pay a penalty of ₹50 for each inactive year, plus the minimum subscription amount for each of those years.

Understanding the 15-Year Tenure & Extension Rules

A PPF account has a mandatory lock-in period of 15 years. After this, you have three choices:

• Close the Account: You can withdraw the entire amount and close the account.
• Extend with Contributions: You can extend the PPF account in blocks of 5 years at a time (e.g., for 5, 10, 15 years, and so on) and continue to deposit money. You will keep earning tax-free interest.
• Extend without Contributions: You can also extend the account in 5-year blocks without making any new deposits. Your existing balance will continue to earn interest, and you can withdraw any amount once per financial year.

Loan and Partial Withdrawal Facilities

PPF offers liquidity for emergencies through loans and withdrawals.

• Loan Facility: You can take a loan against your PPF balance between the 3rd and the 6th financial year of opening the account. The loan amount can be up to 25% of the balance at the end of the second year preceding the loan application year.
• Partial Withdrawal: You can make partial withdrawals from the 7th financial year onwards. The maximum amount you can withdraw is 50% of the balance at the end of the 4th year preceding the withdrawal year, or 50% of the balance at the end of the preceding year, whichever is lower.

The Unbeatable Power of EEE: Triple Tax Benefit